Central banks from 26 countries discussed the inevitability and risks of CBDC

Central banks from 26 countries discussed the inevitability and risks of CBDC

[211] What happens when Central Bank issued Digital Currency (CBDC) comes out?

Contents

Central banks from 26 countries discussed the inevitability and risks of CBDC
CONTENT

  • Central Bank Governors Consider Setting Up CBDC

  • Russia is not yet ready to create a crypto-ruble

  • Implementation of CBDC will not change the economic situation in Russia

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While China is actively adopting its central bank digital currency (CBDC), paper notes and coins may be a thing of the past due to a new financial instrument – central bank digital currency (CBDC). As … More), other countries prefer to observe the process from afar and discuss advantages and risks of a new type of assets.

Central banks from 26 countries discussed the inevitability and risks of CBDC

Russia is thinking about the importance of CBDC

At the last meeting of the Club of Governors of 26 central banks of Central Asia, the Black Sea region and the Balkans, which was chaired by the Central Bank of Russia, the consequences of the coronavirus epidemic and their impact on the world economy were discussed. Club representatives unequivocally agreed with the statement that COVID-19 had a significant negative impact on the economies of countries, which will continue for several more years..

On the other hand, quarantine has contributed to the development of the e-commerce and digital payments sectors. Along with this, the demand for digital currencies has increased dramatically. Governors of central banks expressed the opinion that today countries should pay more attention to studying the possibility of introducing CBDC, as well as changing monetary policy, which would effectively introduce digital currencies into everyday settlements..

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According to Deputy Chairman of the Bank of Russia Alexei Zabotkin, who moderated the session on CBDC, central banks should also carefully study the risks associated with the introduction of digital currencies. In particular, he mentioned data breaches, cyber attacks and hacks, and other risks. The International Monetary Fund (IMF) and other global organizations are now actively studying this issue. Next year, the IMF plans to publish a report on the benefits and risks associated with the implementation of CBDC. BeInCrypto’s editors also previously reported that the Bank for International Settlements will start testing CBDC before the end of this year..

The club meeting was attended by the heads of the central banks of the following countries: Azerbaijan, Albania, Armenia, Bulgaria, Bosnia and Herzegovina, Hungary, Greece, Georgia, Israel, Kyrgyzstan, China, Macedonia, Moldova, Russia, Romania, Serbia, Slovenia, Turkey, Croatia, Montenegro, Czech Republic. The club also includes governors of the central banks of Ukraine, Belarus, Kazakhstan, Tajikistan, Poland.

Russia is not ready to launch a cryptocurrency

Until now, there is no unanimous opinion among the governors of central banks about the effectiveness of CBDC. Digitized national currencies like the digital yuan will inevitably face regulatory challenges. At least that’s what Yana Afanasyeva, CEO of the legal fintech firm Competitive Compliance thinks. In an interview with CNBC, Afanasyeva stated that digital currencies could ultimately strongly impact financial markets due to accumulation and non-use issues..

In particular, the head of Competitive Compliance believes that the main threat in the creation of digital currencies of central banks (CBDC) can be a massive demand among the population to withdraw funds. In the event of the emergence of CBDC, central banks will become the only points of issuance of currency.

Gleb Kostarev, director of Binance in Russia and the CIS, is confident that central banks will gradually implement CBDC, but the process will be extremely slow. It is worth noting that the positions of many central banks and their attitude towards CBDCs have changed, and regulators have become more receptive to innovation, especially in terms of research and knowledge sharing with participants in the digital asset market..

However, domestic experts are confident that Russia is not yet ready either to create a digital currency or to accept it..

“The future of the cryptocurrency is unknown. It’s not at all a fact that it will start. And even if it starts, it is not a fact that it will affect anything. We believe more in decentralized cryptocurrencies. We see a plus in the crypto-ruble that when creating their own digital currency, the authorities “approve” the very existence of digital assets, which include cryptocurrencies. So, perhaps, over time, it will be possible to come to the recognition of cryptocurrencies and their right to turnover in Russia, ”said Andrey Amris, UMI cryptocurrency ambassador in an exclusive interview for BeInCrypto.

Central banks from 26 countries discussed the inevitability and risks of CBDC

You can find out the opinions of other experts regarding the future of the cryptocurrency here.

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